D.C. officials felt impasse on Capitol Hill keenly

For the second time this year, D.C. officials drew up memos, planned inter-agency briefings and put vacation plans on ice while power brokers on Capitol Hill worked through a stalemate with major implications for the District.

And, once more, their plans were all for naught as the partisan leaders brokered a last-minute deal.

“It costs many, many hours of staff time at all levels that could have been better used doing the city’s business,” said David Umansky, spokesman for D.C. Chief Financial Officer Natwar M. Gandhi.

As the seat of the nation’s government, the District has a direct link to any federal shake-up and relies on appropriations from Congress to fund its courts and other city functions. So while constituents around the country fumed about Congress‘ inability to raise the debt ceiling until Sunday’s handshake, the District fretted over its particularly vulnerable position.

The uncertainty cast a pall of deja vu over the John A. Wilson Building, after the threat of a federal government shutdown during April budget talks had residents wondering if their garbage would be picked up, if parking tickets would be issued or the city’s museums would shut out throngs of tourists.

This time, the District worried more about Capitol Hill’s effect on the financial lifeblood of the city instead of day-to-day operations.

The city expects to receive $2 billion in direct revenues from the federal government in fiscal year 2011, including $1.4 billion from Medicaid, Mr. Gandhi said in a letter to city leaders. A loss in any of this funding would have to be replaced by local revenue or service cuts, he said.

A disruption in the credit markets could have prevented the District from borrowing an anticipated $900 million in October. Without these funds, it might not meet its obligations.

Both situations put D.C. officials in the odd situation of preparing for the worst, while recognizing that doomsday was unlikely to come.

“We cannot come to Aug. 2 and not have this solved, and I can’t believe that we will,” Mayor Vincent C. Gray said last week.

Mr. Gray said it is “time for leaders to lead,” and council Chairman Kwame R. Brown had arranged for the CFO and mayor to brief the full council on Monday on its contingency plans “should the federal government reach an impasse.” The meeting was canceled in light of Sunday’s apparent deal.

Meanwhile, the city’s budget personnel had created documents and set up meetings to go over their finances and contingency plans just in case the worst happened, according to Mr. Umansky.

“You have to draw up scenarios,” he said. “You’re going through the budget with a fine-toothed comb.”

Mr. Gandhi is not thrilled with the deal on the table, noting it cuts spending instead of providing economic stimulus to the nation.

“It’s going to be very harmful to the states and municipalities,” Mr. Umansky said.